Chase 5/24 Rule and Business Credit Cards

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If you’re in the miles and points space one thing you need to know is the Chase “5/24” rule: for most Chase credit cards, a new application will not be approved if the applicant has opened more than 5 new credit cards (from any bank) in the 24 months prior to their application. If you apply for a card and are denied for this reason, no amount of pleading with the bank will get your application approved.

How does Chase’s 5/24 rule impact business credit card applications

The 5/24 rule applies to most of the most attractive Chase cards, including all of the credit cards linked to the Chase Ultimate Rewards program (Freedom, Freedom Unlimited, Sapphire Preferred, Sapphire Reserve, Ink Cash, Ink Preferred), all of their United Airlines and Southwest Airlines cards, the Marriott Premier personal credit card, and the Slate card (which has no rewards, but offers a 0% introductory interest rate and free balance transfers for the first 60 days).

While this is a barrier for those who have been signing up for credit card bonuses for a long time – and those who want to get started doing so – it’s still possible to open new credit cards without running afoul of this rule. That’s because Chase calculates your 5/24 status based on your personal credit report, and there’s one useful category of credit cards that don’t (usually) appear there: business credit cards.

Small business cards from most major banks (including American Express, Bank of America, Chase, and Citi) do not appear on your personal credit report (unless you default), and will not be considered by Chase when considering your eligibility under this rule (even though Chase obviously knows what Chase accounts you have open) This means that you could potentially have opened business credit cards in the past 24 months and still get approved for a new Chase credit card that is subject to the 5/24 rule, since those accounts will not appear on your personal credit report to be counted against you.

(Note that business cards from some banks – most notably Capital One – do show up on your personal credit report).

Several banks have small business credit cards that are attractive to people interested in earning miles and points.

American Express offers business versions of their Platinum, Gold, and Green charge cards (which are all part of the Membership Rewards program), their Starwood Preferred Guest, Delta Air Lines, and Hilton credit cards; they also offer business-specific cards like the Blue Business Plus and the SimplyCash Plus (a cashback card).

Bank of America has business versions of their Alaska Airlines, Asiana Airlines, and Spirit Airlines cards.

Barclay’s has a business version of their American Airlines Aviator card and their Jetblue credit card.

Citi has a business American Airlines card, as well as a business ThankYou Rewards card.

US Bank offers business cards with Radisson Rewards, Korean Air, and their own FlexPerks program.

Even if you don’t consider yourself a small business owner, you might qualify for a small business credit card. Common examples of small businesses include working as an independent contractor (including “gig economy” jobs like driving for a ride-sharing service or a delivery app), selling household goods on Amazon, eBay, or Craigslist, or writing a blog. You typically don’t have to have an Employer Identification Number (EIN) issued by the IRS (though if you do, it’s free and fast to obtain online). The IRS and banks have different definitions of what’s considered a business. Just make sure that you tell the truth to the banks about your current and/or anticipated income, and report all your income to the IRS (whether as a small business or as “hobby income”).

Here’s the bottom line: most banks’ small business credit cards don’t count against Chase’s 5/24 rule. This means if you’ve got a Chase card in mind that you can’t get because of 5/24, you can open a business card now (if you’re eligible), and they won’t count against you when you want to apply for a Chase credit card later.

Mar 27, 2018Mary Renking

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